Southern California -- this just in

Lobbyists, labor rally to save L. A. redevelopment agency

January 11, 2012 | 12:20
pm

Lobbyists at Los Angeles City Hall pressed the City Council on Wednesday to take legal responsibility for its Community Redevelopment Agency, one day after lawmakers got a grim report on the financial risks of doing so.

Late Tuesday, two high-level analysts urged the City Council to walk away from the agency, one of 400 targeted for elimination by the state, rather than risk taking on its liabilities and nearly 200 employees. City officials contend that dozens of commercial, housing and public construction projects are currently in jeopardy.

Appearing before the council’s Housing and Economic Development Committee, representatives of an array of real estate interests urged the council to become the so-called “successor” of its redevelopment agency, despite the analysts' warning that the city budget could be saddled with $109 million in costs in the middle of a financial crisis.

Lobbyist Tim McOsker, a lawyer with the firm Mayer Brown, acknowledged that there were significant dangers from taking on redevelopment -- and a new workforce of 192 employees. “But imagine the risks for those folks who are investing big dollars in big projects,” he said.

“Are you going to cut and run? Or are you going to work it out with Sacramento?” McOsker asked council members.

Redevelopment officials now contend that even projects approved before June, when the state legislature passed its law ending redevelopment, would be in trouble if another government agency took over the city’s redevelopment activities. That would include $52 million approved last year for a parking garage around the downtown museum being developed by billionaire Eli Broad, said Madeline Janis, one of Mayor Antonio Villaraigosa’s seven redevelopment employees.

With such warnings in mind, City Hall lobbyist John Whitaker told council members they should not “send the wrong message to the development community” by leaving the task of sorting out its redevelopment commitments to another government agency. And lawyer Shiraz Tangri, another registered lobbyist, warned the city could face legal liability by failing to honor its existing redevelopment obligations.

“The litigation risks remain very heavy for the city if it walks away from these projects,” warned Tangri, who worked on efforts to develop the Grand Avenue project.

The city has used redevelopment to purchase land and identify developers to construct housing, retail and office projects around the city. That work has led to new development around the city, particularly in downtown and Hollywood. But Gov. Jerry Brown and the state legislature contend the city cannot afford those activities in a major economic downturn -– and say redevelopment money could be better spent on schools and public safety.

Real estate lobbyists weren’t the only ones to speak out. Housing advocates voiced fears about the prospects for future development of low-income apartments. Labor leaders, battling to save 192 redevelopment agency jobs, questioned the analysis provided by city budget officials.

Janis, the Villaraigosa appointee, warned that another bureaucracy would not take care to make sure dozens of projects already underway are completed properly.

“You’ve got $400 million worth of projects in the pipeline already,” she told council members. “This is your legacy. This is the mayor’s legacy.”